Synopsis

For more than three decades, all manner of critics of socialist states - non-socialists and socialists alike- have excoriated one of the most unfortunate consequences of the Stalinist-style command economy: its proclivity to favor heavy industry over other economic sectors. Ironically, these systems set up in the name of "the people's" interest shortchanged their constituents' livelihood, as factories and foundries spewed out an endless stream of machinery and metals at the expense of consumer items and daily necessities.

In the late 197o's, after the death of Mao Zedong, Chinese leaders were able openly and soberly to scrutinize their faltering industrial system. Under the determined leadership of Deng Xiaoping, they quickly altered the proportions of industrial output in favor of consumer goods. The Chinese leaders had two chief economic goals: to increase the financial returns to the central government and to lay the foundation for a reoriented future pattern of national growth that would give China a secure niche in world markets. They also hoped to open up new employment channels and to meet mass needs for consumer goods. This study shows why and how these goals were chosen and spells out how they were realized.

Though there is no evidence of conscious borrowing, in its vision and tactics the agenda the Chinese leaders chose was highly resonant with what is elsewhere labeled "industrial policy." For this reason, the book draws on the literature of industrial policy in France and Japan, where this form of policy first took root, rather than adopting the more conventional model of comparative communism.

The book uncovers striking similarities between China's post-1979 plan and what occurred in France and Japan after World War II, at the level of elite perception and goals and in societal, behavioral terms. These similar conditions- in context, decision-making pattern, and implementation style provide the framework of analysis for this volume, a framework that could be applied to ex-colonial and dependent Third World economies as well as to more authoritarian socialist planning systems.

Excerpt

This book was conceived and written in that heady, hopeful decade for China scholars of the 1980's. Access to policymakers, to local economic bureaucrats, and to intellectuals was unprecedented and exhilarating. All of this had several consequences for this project. Most basically, it meant that many interviewees were frank, patient, and exceedingly helpful, generous with their data and their time, and open in their explanations.

Their openness spurred me to want to show comparativists how in certain respects the workings of the Chinese political economy, as it struggled toward reform, could be understood along lines similar to those that provided insights about political economies in some noncommunist nations. I even imagined that the Chinese case might set a worthy example for handling certain problems in some noncommunist states.

Indeed, my first urge to write this book grew out of musing about the simultaneous but very dissimilar efforts to handle the burden of obsolete heavy industrial plant and facilities in Pittsburgh, where I then lived, and in China. the state-managed Chinese experience, with its bureaucratically guided mergers and conversions and the resulting apparently negligible unemployment, seemed to me the superior one. Starting from that vantage point, I elected to adopt a framework that eschewed the usual "communist studies" approach and to write in a very broadly cross-systemic vocabulary. Some of my chief findings emerged out of reading about France and Japan.

At the turn of the decade, however, the study has ironically proven to bear more messages for other now formerly socialist states than for the democracies. For with the fall of the old re-